NISM Level 2 Past Paper PDF

FIrst Test \#SUBJECT\# SECTION-2 \#LESSON\# NISM LEVEL 2 (16.12.2021) @\$\#SINGLE\# difficulty:medium language:English Q.1 In a forward contract, the party that's agrees to sell the underlying asset on a certain specified date for a certain specified price is said to have assumed.........? a\...

FIrst Test \#SUBJECT\# SECTION-2 \#LESSON\# NISM LEVEL 2 (16.12.2021) @\$\#SINGLE\# difficulty:medium language:English Q.1 In a forward contract, the party that's agrees to sell the underlying asset on a certain specified date for a certain specified price is said to have assumed.........? a\) A long position b\) A square off position c\) A short position d\) A tradeoff position Q.2 Mr. A sold a put option of strike Rs.400 on PQR stock for a premium of Rs.32. The lot size is 500. On the expiry day, PQR stock closed at Rs. 350. What is your net profit or loss? a\) -25000 (Loss) b\) -9000 (Loss) c\) 9000 (Profit) d\) 25000 (Profit). Q.3 The securities which are placed by clearing members with the clearing corporation as a part of liquid assets are............? a\) Marked to market on a periodical basis b\) Is not marked to market as they are blue chip shares c\) May or may not be marked to market depending on the decision of the Stock Exchange d\) None of the above. Q.4 Contract month means? a\) Month in which the transaction is done b\) Month of expiry of the futures contract c\) Month of beginning of the futures contract d\) None of the above. Q.5 A default by a member in the derivatives segment will be not be treated as default in the cash segments of that exchange - State True or False? a\) TRUE b\) FALSE. Q.6 \_\_\_\_\_risk is the component of price risk that is unique to particular events of the company and/or industry and this risk could be reduced to a certain extent by diversifying the portfolio? a\) Unsystematic Risk b\) Systematic Risk c\) Arbitrage Risk d\) Interest Rate Risk. Q.7 When would a trader make a profit on a short position of September futures? a\) When he buys a October future at a lower price b\) When he sells another September future at a lower price c\) He square of this short position by buying the September future at lower price d\) When he sells October futures at a lower price.. Q.8 Time value and intrinsic value of a call option are always either positive or zero- True or False? a\) TRUE b\) FALSE. Q.9 The main logic behind Position limits is to............? a\) Prevent the market being unduly influenced by the activities of an individual/group of investors b\) Prevent the market being unduly influenced by Central Govt policies c\) Give direction to the market to move up or down as determined by SEBI d\) To encourage high net worth investors to provide direction to the market. Q.10 The seller of the put option gains if price of underlying asset.........? a\) Decreases b\) Increases c\) Does not change d\) Both 2 and 3. Q.11 On the National Stock Exchange, for its index futures, what would be the opening day of its April series? a\) Last Friday of March month b\) Last Friday of April month c\) Last Friday of January month d\) Last Friday of February month. Q.12 When a Client default in making payment in respect of Daily Settlement, the action taken is.............? a\) The client is given 2 days to clear the payments b\) The contract is closed out c\) The broker pays the money and the client refunds to him in 7 working days d\) The client can give bank guarantee in 2 working days to avoid the contract being closed out.. Q.13 If all things remain constant throughout the contract period, the option price will always............... in price by expiry? a\) Fall b\) Rise c\) Either Rise or Fall d\) None of the Above. Q.14 Impact cost is low when the liquidity in the system is poor? a\) TRUE b\) FALSE. Q.15 In the accounting system of open options as on Balance Sheet day, the \"Provision for Loss on Equity Index/ stock Option Account\" is shown as deduction from \"Equity Index/ stock Option Premium\" which is shown under.............? a\) Current Assets b\) Current Liabilities c\) Short term Debts d\) None of the above. Q.16 Operational risks include losses due to.......? a\) Inadequate disaster planning b\) Too much of management control c\) Government policies d\) Income tax regulations. Q.17 As per J. R. Verma Committee recommendations, Volatility should be calculated based on............. Of logarithmic daily returns? a\) Variance b\) Delta c\) Standard Deviation d\) CAGR. Q.18 A trader sells a lower strike price CALL option and buys a higher strike price CALL option, both of the same scrip and same expiry date. This strategy is called.........? a\) Bearish Spread b\) Bullish Spread c\) Long term Investment d\) Butterfly. Q.19 If you buy a PUT option at premium of Rs 20 at the Strike Price of Rs 250, lot is of 400 shares, then the maximum possible loss is............? a\) Rs 5000 b\) Rs 8000 c\) Rs 20,00,000 d\) Unlimited. Q.20 A buyer of Put Option? a\) Has the obligation to take delivery of asset b\) Has the right to buy the underlying asset c\) Has the right to sell the underlying asset d\) Has the obligation to give delivery of asset. Q.21 An Out of the Money option will have : a\) More than 1 intrinsic value b\) Zero intrinsic value c\) Negative intrinsic value d\) None of the above. Q.22 The trading members are required to maintain a net worth of minimum Rs 4 crores. a\) TRUE b\) FALSE. Q.23 Rho is................? a\) Is the change in option price given a one percentage point change in the risk- free interest rate b\) The change in option price given a one-day decrease in time to expiration c\) Speed with which an option moves with respect to price of the underlying asset d\) A measure of the sensitivity of an option price to changes in market volatility. Q.24 An Over the Counter Option is? a\) A private contract b\) Standardized c\) Governed by the rules of stock exchange d\) All of the above. Q.25 The option seller has an obligation and since his losses can be unlimited, he can be a potential risk for the stability of the system. Therefore he has to pay.........? a\) Extra Premium b\) Special Loss Charges c\) Margins d\) All of the above. Q.26 What is a covered call? a\) It's a strategy to sell calls at various strike prices to profit from the premium received. b\) It's used to generate extra income from existing holdings in the cash market c\) It's a strategy of buying a call and sell its future for hedging d\) It's done by buying a call and put of the same strike price.. Q.27 If a trader buys a put option with a higher strike price and sells a put option with a lower strike price, both of the same underlying then this strategy is called..........? a\) Bullish Spread b\) Bearish Spread c\) Straddle d\) Butterfly spread. Q.28 A trader buys a call and a put option of same strike price and same expiry. This is called as............? a\) Butterfly b\) Short Straddle c\) Long Straddle d\) Calendar Spread. Q.29 When you buy a put option on a stock you are owning, this strategy is called..........? a\) Straddle b\) Writing a covered call c\) Calendar spread d\) Protective put. Q.30 Margins are collected on a............? a\) 3 hour basis b\) Daily basis c\) T+2, so on a two day basis d\) Weekly basis, Monday to Friday.. Q.31 The speculators play an important role in the futures market because? a\) They buy in one market and sell in another for arbitrage gains. b\) They transfer their risk to the hedgers c\) They add to the liquidity to the futures markets d\) They take delivery of the commodities at expiration. Q.32 Mr. Kailash has bought 200 shares of Reliance Industries at Rs.850 per share. He expects the price to go up but wants to protect himself if the price falls. He does not want to lose more than Rs. 4000 on this long position. What should the he do? a\) Place a limit buy order for 200 shares Rs.830 per share b\) Place a limit sell order for 200 shares Rs. 830 per share c\) Place a stop loss sell order for 200 shares Rs.830 per share d\) Place a limit buy order for 200 shares at Rs.870 per share. Q.33 What is the intrinsic value of a CALL option? a\) The amount the option is At the Money b\) The amount the option is Out of the Money c\) The amount the option is In the Money d\) The amount the option is Over the Money. Q.34 A farmer agrees to sell 100 tons of sugarcane to a factory after 2 month at a specific price. What is this type of contract known as? a\) Swapation b\) Future Contract c\) Forward Contract d\) None of the above. Q.35 An investor takes an short position on nifty by selling 10 lots at 5500. When he squares up the position he finds that he has made a profit of Rs 25000. The lot size of Nifty is 50. Which of the following actions helped the investor this profit? a\) Buying 10 lots at 5475 b\) Selling 10 lots at 5550 c\) Selling 10 lots at 5450 d\) Buying 10 lots at 5450. Q.36 Exercise settlement for options contract takes place at...............? a\) Closing price of the underlying b\) Settlement price of the futures contract c\) Closing price of the option contract d\) Closing price for the month contract. Q.37 Mr. Mohit buy 3 Call options of strike price 200 when the spot price was 190 at a premium of Rs 16. Will he have to pay STT? a\) Yes b\) No. Q.38 A person own a portfolio of Rs 5 lacs which has a beta of 1. The current Nifty is 5000. He would like to protect his portfolio against a fall of more than 10%. Put options are available at four strike prices. Which strike price will give the required protection? a\) 5500 b\) 5000 c\) 4900 d\) 4500. Q.39 Spot Value of Nifty is 5880. An investor buys one month Nifty 5950 call option for a premium of Rs 12. This option is.............? a\) In the Money b\) At the Money c\) Out of the Money d\) The data is insufficient. Q.40 An Option Contract which will not be exercised on the expiry date is............? a\) An Out of the Money option b\) An Deep in the Money option c\) An In the Money option d\) None of the above. Q.41 Which of the following statements is TRUE with respect to time value of options? a\) Only an In the Money Option has time value b\) Only Call options have time value c\) The time value of the option is the sum of its intrinsic value and premium d\) The longer the time to expiration, greater is the option time value. Q.42 The Lot sizes of Options are............? a\) Same as that of Futures b\) Double that of futures as only the premium is payable / received c\) Very different from futures d\) Half of Futures. Q.43 The value of a call option............... with a decrease in spot price? a\) increases b\) decreases c\) remains constant d\) either increases or decreases depending on Nifty movements. Q.44 On the derivative exchanges, all the orders entered on the Trading System are at prices exclusive of brokerage. a\) TRUE b\) FALSE. Q.45 Nifty future is trading at 4850. An investor buys a 4900 current month call at 100. What should be the closing price of Nifty above which the investor starts to make profits? a\) 4850 b\) 4900 c\) 5000 d\) 5100. Q.46 Three Call series of XYZ stock - January, February and March are quoted. Which will have the lowest Option Premium (same strikes)? a\) March b\) February c\) January d\) All will be almost equal. Q.47 The Indian derivatives market has 6 underlying futures contract available at a given time - True or False? a\) FALSE b\) TRUE. Q.48 Which of these CALL options are Out of The Money (OTM)? a\) The spot price is Rs 350 and strike price is Rs 330 b\) The spot price is Rs 350 and strike price is Rs 370 c\) The spot price is Rs 350 and strike price is Rs 350 d\) Depends on the Delta of the option. Q.49 Mr. Sunil wishes to buy a futures contract of Tata Steel shares. He should............ ? a\) make payments for the full value of the contract b\) make the margin payments as calculated by the exchange c\) hedge his position in Tata Steel in the Options market d\) None of the above. Q.50 Which statement is false with respect to Futures market? a\) There is daily settlement b\) There are standardized contract terms c\) No margin payment is required d\) Traded on organized exchanges. Q.51 An option with zero intrinsic value is called............ ? a\) OTM - Out of The Money option b\) ATM - At The Money option c\) ITM - In The Money option d\) Both - At The Money and Out of The Money options. Q.52 The options which are traded on a exchange are standardized. a\) TRUE b\) FALSE. Q.53 The Option which gives its holder a positive cash flow is called a............ ? a\) At the money option b\) Out of the money option c\) In the money option d\) Delta. Q.54 You are long in ICICI Bank Ltd futures at price Rs 1000. The prices rises to Rs 1020 next day. The Mark to Market margin will be credited to your account. True or False? a\) FALSE b\) TRUE. Q.55 Around 60% of the trading volume on the American Stock Exchange is from.......... ? a\) Index Futures b\) Index Funds c\) ETFs d\) Index Options. Q.56 The features of Futures are quiet similar to............. ? a\) Options b\) Swaps c\) Debentures d\) Forwards. Q.57 The Intrinsic value of an In the Money option is the difference between the Market Price and the Exercise price - State True or False? a\) TRUE b\) FALSE. Q.58 The losses for a seller of a Call options are...............? a\) limited b\) unlimited. Q.59 A writer of a naked PUT option is............... ? a\) Bullish and pays the premium b\) Bullish and receives the premium c\) Bearish and pays the premium d\) Bearish and receives the premium. Q.60 A trader sells a PUT option of strike Rs 100 on ABC stock for a premium of Rs 25. On expiry day, the ABC stock closed at Rs 50. What is the trader\'s profit or loss in Rs.? ( Lot size is 1000 ) a\) 25000 b\) -25000 c\) 50000 d\) -50000. Q.61 We can get high returns from many investment products in the market in an absolutely risk free manner - State True or False? a\) False b\) True. Q.62 Which tax is applicable for equity transactions done on a recognized stock exchange? a\) Securities Trading Tax b\) Equity Trading and Service Tax c\) Derivatives Transaction Tax d\) Securities Transaction Tax. Q.63.................. Of the option is the one who by paying the option premium buys the right but not the obligation to exercise his option on the seller. a\) Buyer b\) Seller c\) Buyer or Seller d\) None of the above. Q.64 Measures the sensitivity of the option value to a given small change in the price of the underlying asset. a\) Delta b\) Theta c\) Rho d\) Vega. Q.65 In case of CALL OPTION, it gives the buyer the right to................? a\) buy the underlying at market price b\) buy the underlying at set price c\) sell the underlying at market price d\) sell the underlying at set price. Q.66 Tick size depends on a\) The Delta of the security b\) Its fixed by the exchange c\) Volume in that security d\) The Interest rates. Q.67 If you are a seller of put option, you expect.........? a\) No change in the price b\) Increase in the price c\) Decrease in the price d\) Both 1 and 2. Q.68 A European option can be exercised only on expiry date - State True or False? a\) TRUE b\) FALSE. Q.69 The potential exposure is calculated by the clearing corporation............... ? a\) on the last trading day of the contract month b\) on the last trading day of the week c\) at the end of the trading day d\) on real time basis. Q.70 A trader sells a future contract and prices rises. The trader will............ if he squares up the position. a\) make a profit b\) make a loss c\) Insufficient data d\) None of the above. Q.71 An Equity based Mutual Fund can sell Index Futures to hedge its position - True or False? a\) True b\) False. Q.72 If the price of the underlying stock of a PUT option is very volatile,........................ ? a\) the premium will comparatively be lower b\) the premium will comparatively be higher c\) the premium will be zero d\) No effect on option premium. Q.73 A trader is long on ABC stock April futures at 3100. He shall make a loss if the futures price moves to..................... ? a\) 3300 b\) 3200 c\) 3400 d\) 3000. Q.74 The daily Mark to Market gain or loss is realized................? a\) in the equity spot market b\) in the futures market c\) in Swap trading d\) in forwards market. Q.75 It is recommended but not compulsory for the trading members to have dealers and sales personal in the derivatives market who have passed a certification programme approved by SEBI - State True or False? a\) True b\) False. Q.76 Margins in the derivative segment have to be collected from all clients, including Financial Institutions and FIIs - State True or False? a\) True b\) False. Q.77 Investors who are called Bulls are those investors who believe the market or stock will fall - State True or False? a\) True b\) False. Q.78 A portfolio with 200 stocks is only half as risky as another portfolio with 100 stocks - State True or False? a\) True b\) False. Q.79 You have created a Short Position on futures contract. This can be squared up by...................? a\) by executing a purchase of a Call option of the same security b\) by executing a forward contract c\) by executing a purchase of the same futures contract d\) by executing a sale of the same futures contract. Q.80 If a Trading member defaults in the derivative segment, he can still continue the trading business in the cash segment. - True or False? a\) FALSE b\) TRUE. Q.81 If the price of a future contract increases, the mark to market margin account of the holder of the short position in that contract is credited for the gain. State whether True or False? a\) TRUE b\) FALSE. Q.82 The ask price is the price at which.................. ? a\) the cleaning corporation settles the transaction b\) the trader is prepared to sell the share c\) the trader is prepared to purchase the share d\) the trader is prepared to either buy or sell the share. Q.83 In India, futures and options on individual stocks are allowed on.................. ? a\) A few selected stocks only b\) All stocks listed on any of the exchanges c\) All stocks with stock price of more than Rs.100 or Rs 50 in A and B group resp. d\) Only those stocks which are simultaneously listed on all the stock exchange in India. Q.84 In case of Call options, if the market price is less than the exercise (strike) price, the option will............... ? a\) expire worthless b\) seller of the option will exercise it c\) will definitely get exercised d\) none of the above. Q.85 Calendar spreads carry only.......... risk? a\) Speculative b\) Market risk c\) Basis risk d\) Interest risk. Q.86 Does trading in derivatives become expensive due to high margins? State Yes or No. a\) Yes b\) No. Q.87 In an in the money PUT option................... ? a\) strike price would be lower than the market price b\) exercise price would be equal to the market price c\) strike price would be higher than the market price d\) strike price would be zero. Q.88 In an out-of-the money put option................ ? a\) Strike price would be higher than the market price b\) Exercise price would be equal to the market c\) Strike price would be lower than the market price d\) strike price would be zero. Q.89 A trader sold on ABC Stock Futures Contract at Rs.354 & the lot size is 900. What is your profit or loss if you purchase the contract back at Rs.341? a\) Rs 11700 b\) - Rs 11700 (Loss) c\) Rs 8300 d\) - Rs 8300 (Loss). Q.90 Which of the following is not an application of indices? a\) index derivatives b\) exchange traded funds c\) private equity funds d\) Index funds. Q.91 The gain or loss is realized on daily basis due to mark to market mechanism in which of the following contracts? a\) Forward Contracts b\) Contracts in Swaps c\) Future market contracts d\) Equity Cash Market contracts. Q.92 A future trading is considered more risky than equity trading due to.....................? a\) high leverage b\) High pressure c\) high volatility d\) high liquidity. Q.93 The derivatives segment of a Stock Exchange is under the same governing council as the cash segment - State True or False? a\) True b\) False. Q.94 A naked call option means that the writer does not currently owns the underlying - State True or False? a\) True b\) False. Q.95 A Writer of an option.............? a\) has obligation in the contract b\) receives the premium c\) has choice in the contract d\) Both 1 and 2. Q.96 The daily settlement prices of equity derivatives are decided by.....................? a\) Clearing Corporation b\) SEBI c\) Brokers Association d\) RBI. Q.97 A client registration form contains clients.......... ? a\) investment objectives b\) background c\) beneficial identity d\) all of the above. Q.98 The ASK price is always............? a\) greater than the bid price b\) equal to bid price c\) lower than the bid price d\) none of the above. Q.99 If you have a long or short position in a futures contract, this can be closed by initiating a reverse trade - True or False? a\) True b\) False. Q.100 A person who is bullish and a payer of premium is a................ ? a\) buyer of call option b\) seller of call option c\) buyer of put option d\) seller of put option. Q.101 Mr. A buys a call option with lower strike price and sells another call option with higher strike price both on the same underlying share and same expiration date, the strategy is called......... a\) Bull Spread b\) Bear Spread c\) Butterfly Spread d\) Calendar Spread. Q.102 Stock price is.....................? a\) Same as in the near month future contract b\) Same as exercise price of an option c\) Same as strike price of an option d\) The price of the underlying in the spot market. Q.103 The maximum possible loss for the option buyer is the premium paid, but the profits can be higher depending on the underlying price movement. This is true for which type of options? a\) True for all types of options b\) True for American options only c\) True for European options only d\) False for all types options. Q.104 Any person who wishes to open a Trading Account must be given the following documents by his trading member -- a\) Complete version of all the laws of SEBI b\) Risk disclosure document c\) All the rules & regulations of the exchange d\) SEBI guidelines on the subject. Q.105 Investor Mr. X wants to sell 11 contracts of Feb series at Rs.6300 & investor Mr. Y wants to sell 13 contracts of March series at Rs.6450. Lot size is 50 for both these contracts. The initial margin is fixed at 6%. How much initial margin is required to be collected from both these Investors (sum of initial margin of X and Y) by the broker? a\) Rs 251550 b\) Rs 459450 c\) Rs 640000 d\) Rs 374900. Q.106 Which of the following complaints can be taken up by the exchange for redressal? a\) Claims for notional loss, opportunity loss for the disputed period or trade b\) Complaints pertaining to trades not executed on the Exchange by the complainant c\) Claims of sub-broker/authorized persons for private commercial dealings with the trading member d\) Excess Brokerage charged by Trading Member / Sub-broker. Q.107 Mr. Ravi purchases 10 call options on stock at Rs. 20 per call with strike price of Rs 350. If on exercise date, stock price is Rs. 310, ignoring transaction cost, Mr. Ravi will choose.......? a\) To exercise the option b\) Not to exercise the option c\) May or may not exercise the option depending on whether he likes the company or not d\) May or may not depending on whether he is in town or not. Q.108 Investor protection fund for the derivatives segment is.............? a\) Same as that of cash segment b\) Independent of that of cash segment c\) Contributed by ministry of finance d\) No investor protection fund is there for the derivative segment. Q.109 A calendar spread in index futures is treated as in a far month contract when the near months contract is expired. a\) Long position b\) Hedged position c\) Naked position d\) Short position. Q.110 A Buyer or holder of the option is the party to the contract who has............? a\) The obligation but not the right b\) The right but not the obligation c\) The right and the obligation d\) None of the above. Q.111 Delta is..................? a\) the change in option price given a one-day decrease in time to expiration b\) is the change in option price given a one percentage point change in the risk- free interest rate c\) speed with which an option moves with respect to price of the underlying asset d\) a measure of the sensitivity of an option price to changes in market volatility. Q.112 In futures market, basis is referred to as...............? a\) Beta of the future stock b\) Volatility of the market c\) Price difference between Spot and Future price d\) The Bid-Ask price. Q.113 You have sold one lot of JSW Steel futures for Rs 900 (lot size 250) expecting that this share will go down. But you also want to protect yourself against any loss of more than Rs 2000. What should you do? a\) Place a limit order to buy at Rs 908 b\) Place a stop loss buy order at Rs 892 c\) Place a stop loss buy order at Rs 908 d\) Place a limit sell order at Rs 908. Q.114 You are interested in creating a perfect hedge for your portfolio. For this you need to sell index futures and the index futures sold should be equal to...............? a\) Value of your portfolio + Beta of your portfolio b\) Value of your portfolio / Beta of your portfolio c\) Value of your portfolio \* Beta of your portfolio d\) Value of your portfolio - Beta of your portfolio. Q.115 Position limits have been designed to.............? a\) Prevent the markets from being wrongly influenced by Government policies. b\) Support the market and determine its movements c\) Stop the markets being wrongly influenced by the trading activities of investor(s). d\) All of the above. Q.116 Value-at-risk calculations are done on the basis of..................? a\) Best possible market conditions b\) Ideal market conditions c\) Volatility d\) 90 % risk parameter. Q.117 What is the main reason for which hedgers enter the futures market? a\) To profit from price fluctuations b\) To make long term investments c\) To protect against any price uncertainties d\) To make big profits. Q.118 An Investor Mr. Shah wants to buy 8 contracts of January series at Rs 740 and an investor Mr. Patel wants to sell 5 contracts of February series at Rs 754. Initial Margin is fixed at 6%. How much initial margin has to be collected from them? Market lot is 250. a\) Rs 56,550 b\) Rs 88,800 c\) Rs 1,45,350 d\) Rs 1,87,600. Q.119 A cotton exporter has entered into a contract to supply cotton after three months. He will be buying that cotton soon. But he is afraid that a sudden rise in cotton prices may erode his profits. What should he do? a\) He can import cotton and export them at a later date b\) He should cancel the contract as cotton prices are very volatile c\) He should buy cotton futures d\) He should sell cotton futures. Q.120 It is recommended but not compulsory that all Stock Exchanges of India have a uniform settlement cycle. True or False? a\) TRUE b\) FALSE. Q.121 As an option moves more In The Money, the absolute value of Delta will.........? a\) Increase b\) Decrease c\) Remain same d\) None of the above. Q.122 On what occasion form the below, the derivative segment of the stock market has to report to SEBI? a\) Occasions when the 90% Value at Risk (VaR) limit has been violated b\) Occasions when the 96.5% Value at Risk (VaR) limit has been violated c\) Occasions when the 95% Value at Risk (VaR) limit has been violated d\) Occasions when the 99% Value at Risk (VaR) limit has been violated. Q.123 An option which would give a negative cash flow to its holder if it were exercised immediately is known as............? a\) At the money option b\) In the money option c\) Out of the money option d\) None of the above. Q.124 The option premium is decided by...............? a\) SEBI b\) Stock Exchanges c\) By buyers and sellers d\) By Stock Brokers. Q.125 In the Arbitration procedure, the arbitrator conducts the arbitration proceeding and passes the award normally within a period of............. Months from the date of initial hearing. a\) One b\) Two c\) Three d\) Four. Q.126 STT is applicable on all............... transactions for both futures and option contracts a\) Buy b\) Sell c\) Both Buy and Sell d\) No STT on Futures Trading. Q.127 SEBI\'s centralized web based complaints redress system which provides online access 24 x 7 is called...................? a\) SERA b\) SEBI COMPSYS c\) SWCOMP d\) SCORES. Q.128 Churning means.............? a\) A specialized arbitrage between Futures and Options b\) Excessive unwarranted trading by brokers/agents for generating commissions c\) Delta Hedging using Rho and Theta d\) Specialized Portfolio Management. Q.129 Initial Margin is? a\) The margin which is paid when a trading member starts his business b\) The Margin which is paid at the time of buying shares in the spot market c\) The margin which a trading member needs to pay when applying for membership d\) The margin which is paid at the time of entering futures contract. Q.130 What does selling short a stock means? a\) Seller owns the stock he is supposed to deliver b\) Seller has sufficient time to deliver the stock which he sold c\) Seller does not own the stock he is supposed to deliver d\) Seller has to deliver the stock within a short time. Q.131 Buying calls at a strike of 5100 and selling calls at a strike of 5300 is an example of..................? a\) Calendar Spread b\) Bull Spread c\) Bear Spread d\) Arbitrage Spread. Q.132 The normal trading in the derivative banned scrip is resumed after the open outstanding position comes down to....... or below of the market wide position limit? a\) 90% b\) 85% c\) 80% d\) 75%. Q.133 ABC stock is quoting at Rs 475 in the cash market. The call option for 450 call is quoted at Rs 35. What is the intrinsic value of this option? a\) Rs 50 b\) Rs 35 c\) Rs 25 d\) Rs 70. Q.134 The theoretical future price is considered for............ is case a futures contract is not traded during the day? a\) The opening price b\) The daily mark to mark settlement price c\) Premium settlement d\) Last traded price. Q.135 any member or client who increases his existing positions or has created a new position in a F&O banned security, the client/trading members will be subject to a penalty 1% of the value of increased position subject to a minimum of Rs....... And maximum of Rs........? a\) 5000 , 100000 b\) 5000, 50000 c\) 10000, 100000 d\) 10000, 25000. Q.136 Even though there are no price bands applicable in derivatives segment, to avoid erroneous order entry operating price ranges are kept and the operating price range for index futures is............? a\) 5% b\) 10% c\) 15% d\) 20%. Q.137 On expiry, the settlement price for Wipro will be the............? a\) Last half hour weighted average price of Wipro Futures b\) Closing price of Wipro in the cash market c\) Opening price of Wipro in the cash market d\) The last traded price of Wipro in the cash market. Q.138 A client can use cross margining across Cash and Derivatives segment - True or False? a\) TRUE b\) FALSE. Q.139 If the Initial Margin is changed then it will apply only to fresh contracts and not to previous outstanding contracts - True or False? a\) TRUE b\) FALSE **\ \ \ Answers from Questions 1 to 139** 1 C 41 A 81 C 121 D ---- --- ---- --- ----- --- ----- --- 2 A 42 B 82 A 122 B 3 B 43 C 83 B 123 C 4 A 44 B 84 D 124 C 5 B 45 D 85 C 125 B 6 D 46 A 86 C 126 D 7 C 47 C 87 A 127 C 8 D 48 A 88 B 128 C 9 A 49 D 89 A 129 B 10 C 50 C 90 B 130 A 11 C 51 C 91 C 131 A 12 D 52 A 92 A 132 B 13 C 53 C 93 C 133 C 14 B 54 B 94 A 134 A 15 C 55 C 95 A 135 A 16 A 56 A 96 C 136 B 17 B 57 B 97 B 137 B 18 D 58 D 98 D 138 A 19 A 59 C 99 C 139 C 20 D 60 A 100 A 21 B 61 B 101 B 22 A 62 D 102 C 23 C 63 A 103 A 24 C 64 C 104 B 25 D 65 B 105 C 26 B 66 A 106 A 27 A 67 C 107 D 28 C 68 D 108 C 29 D 69 A 109 A 30 B 70 B 110 B 31 A 71 C 111 C 32 B 72 C 112 A 33 C 73 B 113 D 34 A 74 D 114 B 35 C 75 A 115 C 36 C 76 B 116 A 37 B 77 D 117 B 38 D 78 C 118 C 39 A 79 A 119 A 40 C 80 B 120 C